Only One Place of Redress: African Americans, Labor Regulations, and the Courts from Reconstruction to the New Deal

The Market Is the Best Friend of All Victims of Discrimination

Most black people believe that history demonstrates the necessity of labor-market regulations on their behalf. The message of this book is that the one place of redress blacks (and other minorities) had against discriminatory state and federal economic regulations was the court system guided by the principles of what came to be called, and later was excoriated as, Lochnerian jurisprudence. The free market, protected by the courts following long-established precedents, was the friend of black workers; politics was the enemy.

In 1905 the U.S. Supreme Court in Lochner v. New York struck down a state regulation setting maximum working hours on the grounds of freedom of contract. From then until 1937 the Court frequently struck down economic regulations for that reason and because class legislation–which benefited special interests at the expense of others–was illicit. Conventional wisdom holds that Franklin Roosevelt’s 1937 defeat of Lochnerian jurisprudence (by his Court-packing threat) was a great triumph in the battle for social justice. To the contrary, Bernstein argues, Roosevelt’s triumph was a blow to the interests of blacks.

The first chapter of this well-researched book examines the emigrant-agent laws passed in several southern states to inhibit black workers from migrating from low-wage to higher wage states. Typically, the laws required the agents–who informed workers of better opportunities elsewhere, recruited them to relocate, and helped them do so–to pay exorbitant licensing fees and imposed severe penalties for failure to comply. Plantation owners and other employers in the out-migration states lobbied for such legislation to keep their black labor force captive. The agents, however, were often able to overturn such laws in courts on Lochnerian grounds (even before the Lochner decision).

Chapter two focuses on the use of occupational licensing laws to discriminate against blacks in plumbing, barbering, and medicine. The Supreme Court upheld licensing of physicians in 1888 on public-health grounds. In 1921 the Court empowered state legislatures to set up licensing boards for other occupations with the authority to “determine the subjects of which one must have knowledge; the extent of the knowledge in each subject; the degree of skill requisite; and the procedure to be followed in conducting the examination.” In the cases of plumbing and barbering, white unions exploited the licensing statutes to exclude blacks. In medicine the 1910 Flexner report was used by white elitist medical associations to close black medical schools and prevent blacks even from sitting for licensure exams.

Chapter three explains how white unions were able to exploit the 1926 Railway Labor Act (RLA), which gave them monopoly control of the railway labor market, to overcome benefits received by blacks from various labor injunctions and “yellow dog” (union-free) contracts. Prior to the RLA, courts frequently issued injunctions against discriminatory practices of railway unions in labor disputes. These injunctions were a blessing to blacks who, for example, were able to replace white strikers. Union-free contracts often became opportunities: for blacks to take the jobs of white workers who were dismissed for violating their union-free promises. Both labor injunctions and yellow-dog contracts were upheld by the Supreme Court on Lochnerian grounds.

Chapter four tells how the 1931 Davis-Bacon Act was (and still is) used to decrease employment opportunities for blacks in the construction industry. The Act requires that “prevailing wages” (in practice, union wages) be paid to workers on construction projects financed with federal money. Excluded from white unions, the only way blacks could compete for construction jobs was to work for union-free contractors for market wages lower than union-scale wages. Those union-free contractors and their black employees were effectively excluded from those projects by Davis-Bacon, which was racist in intent and effect.

Chapter five deals with New Deal labor laws including the National Labor Relations Act (NLRA, 1935) and the Fair Labor Standards Act (FLSA, 1938). Section 9(a) of the NLRA made monopoly bargaining the law of the land, and unions with monopoly power often excluded blacks from membership. The FLSA, which was advocated by Northern politicians, unions, and many employers, was designed to inhibit competition from southern employers, many of whose workers were blacks. If the Supreme Court hadn’t tossed out Lochnerian jurisprudence, the offending legislation would never have been allowed to stand and black workers might be much better off today.

At the very least, the author makes it clear that Lochnerian jurisprudence provided a safe haven for blacks against class legislation aimed at them. The market, not politics, is the best friend of all victims of discrimination. Thanks to David Bernstein for emphasizing that vital point with his excellent historical, legal, and economic analysis.

THE FREEMAN

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December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.